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University officials released the following statement on Feb. 24 regarding the sale of Saint Louis University Hospital. Four days later, Tenet Healthcare Corp. assumed, as scheduled, the ownership of the hospital.
Feb. 24 -- Tenet Healthcare Corp. and Saint Louis University representatives today announced the signing of the final purchase agreement for Tenet's acquisition of Saint Louis University Hospital. This agreement outlines terms and conditions, describes the structure of the partnership between Tenet and the University and obligates both parties to complete the transaction. It is anticipated that Tenet will assume ownership of the Hospital on Feb. 28, 1998.
The Saint Louis University board of trustees selected Tenet through a competitive and rigorous selection process that began more than a year ago.
In selecting Tenet, the board required legally binding guarantees that the hospital would continue to be operated and managed in a manner consistent with the Catholic, Jesuit values of the University.
Among other things, Tenet has agreed to:
- Adhere to the Ethical and Religious Directives for Catholic Health Care Services of the National Conference of Catholic Bishops.
- Continue the University's pastoral care services for patients and their families, offered seven days a week, 24 hours a day and managed by the University's vice president for mission and ministry.
- Adopt the hospital's current charity care policy in perpetuity, ensuring that its role in serving the city's poor and indigent will continue.
- Assure that the existing graduate medical education programs in pediatrics, obstetrics and gynecology can be maintained in partnerships with other Catholic hospitals.
Lawrence Biondi, SJ, president of Saint Louis University, also issued the following statement:
"Since there was significant interest in the transaction, the board of trustees reaffirmed to the Catholic community that the above four critical requirements would be met. Although the board of trustees did not seek approval or permission from the Holy See (Vatican), the board did, however, cooperate with the Superior General of the Jesuit Order, the Very Rev. Peter-Hans Kolvenbach, SJ, who presented the University's position to the Holy See.
"Cardinal Eduardo Martinez-Somalo, prefect of the Congregation for Institutes of Consecrated Life and Societies of Apostolic Life, and Cardinal Pio Laghi, prefect for the Congregation For Catholic Education, in consultation with Father Kolvenbach, sought assurances from the University that the above four terms and conditions would be included in the final asset purchase agreement. Since the agreement between the University and Tenet had already contained legally binding language to assure Tenet's adherence to these terms, the Board of Trustees willingly provided these commitments. On Feb. 18, 1998, Cardinals Martinez-Somalo and Laghi communicated to Father Kolvenbach that they, as the appropriate representatives and spokespersons for the Holy See (Vatican), had accepted the assurances of the University and that they had no objections to the sale of Saint Louis University Hospital to Tenet."
Michael H. Focht Sr., president and chief operating officer of Tenet, said: "Adding a facility of the stature of Saint Louis University Hospital to Tenet's growing network in St. Louis is enormously gratifying. As a responsible operator of hospitals, we already practice elsewhere what we were asked to commit to by the Saint Louis University board of trustees, and we gladly agreed to honor these requirements. We now look forward to a long and successful relationship with Saint Louis University."
Under the terms of the final agreement, Tenet will pay approximately $300 million for the assets, which include Saint Louis University Hospital, an occupational health subsidiary and several physical facilities and structures.
In addition, the agreement commits Tenet and Saint Louis University to establish a partnership that is intended to enhance health care education and services in the greater St. Louis area in collaboration with other Tenet hospitals and medical staffs.
A joint development corporation, equally owned by the University and Tenet, will be created, and Tenet has committed to $100 million for new programs and joint ventures.
Tenet will designate Saint Louis University Hospital as its tertiary/quartenary hub within a 150-mile radius of St. Louis, and the company will invest $50 million over five years to maintain the facility as a first-class teaching hospital.
The University will have a strong role in hospital governance -- appointing five members on a 10-seat hospital governing board, half the members on a joint coordinating council for Tenet's St. Louis regional network and a majority of seats on a new network educational advisory committee.
Tenet also will provide $1.5 million to endow a professorial chair in health care ethics and $100,000 for an international conference on health care ethics.
Proceeds from the sale will be placed in the University's Health Sciences Fund Endowment to further the University's mission for health professions education and assure the viability of its School of Medicine, one of five Catholic medical schools in the United States.
In addition, under Tenet ownership the hospital is expected to pay more than $5 million annually in local and state taxes in Missouri.